The Definitive Guide to Income Tax for Expats

If you’re an expat or foreigner living in Ireland or thinking of moving here, you might be wondering how much income tax you’ll need to pay.

Managing your taxes in a new country can be overwhelming, but thankfully, it doesn’t have to be. Our team of experienced tax advisors is here to explain income tax rates for foreigners and expats in Ireland. 

Whether employed, self-employed, or retired, we’ll help you understand your tax obligations and how to best comply with Irish tax laws.

Lets get started.

What is the Tax Rate in Ireland for Foreigners and Expats?

Ireland’s basic income tax rate is the same for everyone, whether you’re a resident or non-resident. 

As of 2024, the standard tax rates are:

• 20% on income up to a certain threshold (known as the standard rate tax band)
• 40% on income above the standard rate tax band.

But this doesn’t mean everyone living and working in Ireland will pay the same amount of tax. 

The total tax you owe depends on factors like your residency status, the type of income you earn, and if you qualify for tax credits.

For example, even though residents and non-residents are taxed at the same rate, residents can claim tax credits (like the Personal Tax Credit) that lower their tax bill.

Non-residents may not be eligible for these credits and may pay more in taxes.

How Income Tax Works in Ireland

Here’s a clear breakdown of how income tax works in Ireland so you can see exactly what affects how much you’ll pay.

Residency vs Domicile Status

Residency status 

If you’re a resident of Ireland, you’ll be taxed on all your income from around the world, no matter where it comes from. But if you’re a non-resident, you only pay taxes on your income in Ireland.

How to find out if you’re a tax resident in Ireland: 

Figuring out if you’re a tax resident in Ireland is straightforward. You will be considered an Irish tax resident if:

• You live in Ireland for 183 days or more during one calendar (tax) year or
• You have spent 280 days or more in Ireland over the last 2 (tax) years, spending at least 31 days in Ireland each year.
• For example, If you spend 140 days in Year 1 and 150 days in Year 2, the total is 290 days. This means you will be a tax resident in Year 2 because you’ve spent more than 280 days in Ireland over the two years (and at least 31 days each year).

Domicile status

Domicile is a more permanent concept than tax residency and refers to the country you consider your permanent home.

Everyone starts with a “domicile of origin” – this is inherited from your father at the time of your birth, assuming your parents were married then.

You’ll keep this original domicile unless you adopt a new one. To gain a domicile in Ireland, you must prove that you plan to live here permanently. This is called acquiring a ‘domicile of choice’ in Ireland.

Being domiciled in Ireland impacts your tax on worldwide income, capital gains, and inheritance. 

Understanding your Irish domicile is important for long-term tax planning and managing your assets and investments in and outside Ireland. If you are in doubt about your domicile position, consult a tax professional.

Double Taxation Agreements (DTAs)

Some countries implement Double Taxation Agreements (DTAs) to ensure you’re not taxed twice on the same income. 

If you’ve already paid your taxes in your home country, DTAs allow you to claim credits or an income/capital gains tax exemption in Ireland. 

Keep in mind: Not everyone can get DTA benefits. Who’s eligible depends on which countries are involved and your situation. Talking to a tax expert to see if you qualify is a good idea.

Types of Income

The type of income you receive will also impact the rate of tax you pay as a foreigner or expat in Ireland:

• Employment income is taxed under the Pay As You Earn (PAYE) system, so taxes are deducted directly from wages or salaries. 
• Self-employment income is taxed at the same rates as regular employment income, but you can usually subtract allowable business expenses from your total income before calculating your tax.
• Pension income is taxed directly if it comes from Irish sources. For foreign pensions, tax rules can vary according to Double Taxation Agreements (DTAs) between Ireland and the country where the pension is from. Often, Irish residents are required to report and pay income tax on their foreign pensions.

Available Tax credits and Deductions

As a tax resident or someone domiciled in Ireland, you can take advantage of various tax credits and deductions (like the Personal Tax Credit and the Employee Tax Credit) that help lower your overall tax bill. We’ll explore these a little more deeply later in this section.

How Income Tax is Calculated for Employed Expats

As an employed expat or foreigner in Ireland, your income tax rate is influenced by your earnings, residency status, and any tax credits you can claim.

Usually, you’ll pay tax using Ireland’s standard rates through the Pay As You Earn (PAYE) system.

On top of that, the amount of Universal Social Charge (USC) and Pay Related Social Insurance (PRSI) will also play a part in your total tax bill.

Guide to PAYE

Under PAYE, every time your wages are paid (whether weekly, bi-weekly, or monthly), your employer deducts Income Tax, PRSI, and USC and pays the amount deducted to Revenue. 

What’s left after these deductions is your “take-home pay”. The PAYE system helps ensure your annual tax is spread evenly across your paychecks, so it’s easier for you to manage.

How is Income Tax Calculated for Employed Expats?

As mentioned earlier, income tax in Ireland is calculated using the same rates for residents and non-residents. But, the total tax you owe can vary based on your income level and personal circumstances.

The PAYE Thresholds for 2024 

Personal circumstances	Tax rate
Single or widowed person no children	20% on income up to €42,000 40% on remaining income above €42,000
Single or widowed, with children (Single Person Child Carer Credit)	20% on income up to €46,000 40% on remaining income above €46,000
Married or civil partnership (one income)	20% on income up to €51,000 40% on remaining income above €51,000
Married or civil partnership (both with income)	20% on income up to €84,000 (combined) 40% on remaining income above €84,000

Example scenarios for income tax calculation

These examples show how income tax is calculated for different household setups:

Example 1: Sarah, a single person whose annual salary is €50,000

• The first €42,000 of Sarah’s €50,000 will be taxed at 20%: €42,000 x 20% = €8,400
• The remaining €8,000 of Sarah’s income will be taxed at 40%: €8,000 x 40% = €3,200
• Her total income tax will be €11,600 (€8,400 + €3,200) before we consider tax credits, PRSI or USC

Example 2: John and Mary, a married couple who both work and have a combined income of €100,000

• John and Mary’s joint income up to €84,000 will be taxed at 20%: €84,000 x 20% = €16,800
• The remaining €16,000 of the couple’s income will be taxed at 40%: €16,000 x 40% = €6,400)
• The total income tax John and Mary will pay is €23,200 (€16,800 + €6,400) before we consider tax credits, PRSI or USC.

How is PRSI Calculated?

Pay-related Social Insurance (PRSI) is paid into the national Social Insurance Fund. The Irish Government uses this money to pay for social welfare benefits and state pensions for Irish residents.

The amount of PRSI you’ll pay under PAYE deduction is decided by how much you make each week. If you earn: 

• €352 or less per week: You’re not required to pay PRSI. (Your employer will pay social insurance on your behalf.)
• Between €352.01 and €424 per week: You pay 4.1% PRSI on all your earnings. You may be eligible for a tapered PRSI credit, with a maximum credit of €12.
• More than €424 per week: You pay 4.1% PRSI on all your earnings without any PRSI credit.

Exemptions for PRSI contributions in another country:

If you work in Ireland but also pay social security in another country, you might qualify for PRSI exemptions or credits, so you don’t end up paying social security twice. Talking to the relevant tax authorities in Ireland and other countries for accurate information is a good idea.

How is Universal Social Charge (USC) Calculated?

Universal Social Charge (USC) is a tax on all your income, including any perks like a company car or free housing you might get as part of your job.

USC applies to everyone living in Ireland with taxable income, regardless of nationality or residency. 

How to calculate USC:

You’re completely exempt from paying USC if you earn less than €13,000 per annum. But, if you earn more than €13,000, you must pay USC on your entire income, including the first €13,000.

Standard rate of USC (2024)

Rate	Income band
0.5%	Up to €12,012
2%	€12,012.01 to €25,760
4%	€25,760.01 to €70,044
8%	Over €70,044
11%	Non-PAYE income over €100,000

USC example scenario

In 2022, Paul’s salary was under €13,000, so he didn’t have to pay any USC. But after getting a raise in 2023, his salary increased to €15,000.

This meant, in 2023, Paul paid USC at 0.5% on the first €12,012 of his salary: €12,012 × 0.5% = €60.06

He paid 5% on the remaining €2,988 of his earnings: €2,988 × 2% = €59.76

This meant Paul paid a total USC of €119.82 for 2023 (€60.06 + €59.76)

Guide to Tax Credits

Tax credits are deductions that reduce the amount of income tax you pay. Many tax credits are available in Ireland, but you can only claim them if you’re a tax resident or domiciled (permanent) resident. N.B. Non-residents can sometimes be entitled to tax credits in certain circumstances.

Here are some examples of typical tax credits:

• Personal Tax Credit: A basic credit available to all individuals.
• Married Tax Credit: A credit for married couples or those in civil partnerships.
• Blind Person’s Allowance: A credit for individuals who are blind or severely visually impaired.
• Single-Parent Family Tax Credit: A credit for single parents.
• Medical Expenses Tax Credit: A credit for certain medical expenses.

For more detailed information on these and other tax credits, please visit https://www.revenue.ie/

How to claim a tax credit certificate:

• Self-assessment: File a self-assessment tax return to claim tax credits directly on your return.
• PAYE system: If you’re employed and pay tax through the PAYE system, your employer will generally claim tax credits on your behalf. You can review the tax credits you are entitled to claim via your online myaccount.

Tax Relief Schemes in Ireland

To attract and keep workers with specialised skills and expertise, Ireland offers several tax relief schemes, including:  

SARP (Special Assignee Relief Programme)

SARP offers a 30% tax relief on a portion of your income above a certain level. The income that qualifies for this relief depends on your job role and total salary.

Who qualifies for SARP:

• Must be an employee assigned to work in Ireland by a relevant employer (usually meaning part of a multinational group).
• Must have been employed outside Ireland for the employer for at least six months prior to the assignment.
• The employee’s income must exceed €100,000 annually.
• Must be a tax resident of Ireland for the relevant tax year.
• The assignment must be for a minimum of 12 months.

KEEP (Key Employee Engagement Programme)

KEEP helps Irish companies offer tax-friendly share options to their employees. It’s a way to reward and retain essential staff, letting them benefit from future company share value increases. The program is mainly designed for employees who are tax residents in Ireland.

Who is eligible for KEEP:

• Employees of small and medium-sized companies (SMEs) who play a significant role in the business.
• Companies that are not publicly traded and meet specific size and revenue limits.

How Income Tax is Calculated for Self-Employed Expats

Managing your income tax as a self-employed expat in Ireland doesn’t have to be as daunting as it seems. 

It’s all about understanding the Self-Assessment system, keeping track of important deadlines, and knowing which business expenses you can deduct. 

Understanding these basics will help make the process smoother, whether you’re a resident or a non-resident.

The Self-Assessment System

As a self-employed person, you’ll use the Self-Assessment system to work out how much income tax you’ll pay. Here’s how it works: 

• Declare your income: Report all your income from self-employment on your tax return.
• File your tax return: Submit your tax return to Revenue by the deadline. The Revenue Online Service (ROS) is the easiest way to do this.

What are the deadlines for filing your tax return?

• Annual tax return: File your tax return by October 31st following the end of the tax year (December 31st).
• Preliminary tax: Pay your preliminary tax by October 31st for the current year. Your preliminary tax is your estimate of the income tax, pay-related social insurance (PRSI), and universal social charge (USC) you expect to pay for a tax year. It’s important to meet these obligations to avoid interest and penalties.

Deductible business expenses 

As a self-employed expat, you can deduct certain business expenses from your gross income before calculating your tax. These include business expenses such as:

• Office Supplies
• Travel expenses
• Professional fees
• Utilities
• Rent
• Training and development

Tax Credits 

You can take advantage of several tax credits, including the Earned Income Tax Credit, available to all self-employed individuals in Ireland, including expats. Right now, this credit is worth €1,700, but keep in mind it may change from year to year.

PRSI

As a self-employed person, you must pay Pay Related Social Insurance (PRSI) Class S contributions at 4% of your income. 

N.B. All PRSI contribution rates will increase by 0.1% from 1 October 2024.

This gives you access to certain social benefits, though it doesn’t cover unemployment benefits. 

If your income is below the minimum threshold, you might not have to pay, but it’s a good idea to check the latest guidelines or consult a tax advisor.

USC

You’ll also need to pay Universal Social Charge (USC) on all your income, including your salary and benefits like a company car or free housing. 

You don’t have to pay USC if your salary is under €13,000. For income over €13,000, the rate starts at 0.5% and increases progressively.

Standard rate of USC (2024)

Rate	Income band
0.5%	Up to €12,012
2%	€12,012.01 to €25,760
4%	€25,760.01 to €70,044
8%	Over €70,044
11%	Self-employed income over €100,000

USC example scenario

In 2022, Paul’s salary was under €13,000, so he didn’t have to pay any USC. But after getting a raise in 2023, his salary increased to €15,000.

This meant, in 2023, Paul paid USC at 0.5% on the first €12,012 of his salary: €12,012 × 0.5% = €60.06

He paid 5% on the remaining €2,988 of his earnings: €2,988 × 2% = €59.76

This meant Paul paid a total USC of €119.82 for 2023 (€60.06 + €59.76)

VAT

VAT (Value Added Tax) is a tax you add to the price of goods and services you sell. If your annual sales exceed €40,000 for services or €80,000 for goods, you must register for VAT.

Real-life examples of self-employed Tax and VAT handling

Joe, a self-employed individual, starts a new business offering widget advice. Here’s how his tax obligations unfold:

Joe registers his business name with the Companies Registration Office (CRO) and also registers for income tax with the Revenue Commissioners. He begins trading and keeps detailed records of all income and expenses.

At the end of the year, Joe’s accountant prepares his accounts and calculates his tax liability based on his profit of €50,000.

• Business expenses: Joe had €5,000 in deductible business expenses like office supplies and allowable travel costs.
• Taxable income: This makes his taxable income €45,000 (€50,000 – €5,000 = €45,000).
• Income Tax: Joe’s tax bill is calculated using Irish income tax rates. For this example, let’s pretend that Joe is in the higher tax bracket.

Joe makes a preliminary tax payment for the next year to avoid interest and penalties. 

If his previous year’s tax was €10,000, he must pay:

• €10,000 for the prior year; and
• €10,000 for preliminary tax for the current year (assuming he bases his preliminary tax on 100% of the preceding year, this is prudent in the majority of cases); so
• Total due by 31 October = €20,000 

As Joe’s business grows and his annual turnover exceeds €40,000, he registers for VAT and starts charging VAT on his services. For example, if Joe charges €100 for his advice, he adds €23 in VAT (assuming a 23% rate), for a total of €123.

Joe files VAT returns and pays the VAT collected every two months.

How Income Tax is Calculated for Retired Expats

If you’re a retired expat living in Ireland, here’s what you need to know about calculating your income tax.

Common Income Sources and How They’re Taxed

Whether you collect income from a pension, rental property, or savings, each type of income is taxed differently:

Pensions

In Ireland, both Irish and foreign pensions are taxable.

• Irish pensions: Irish pensions are taxed at the standard income tax rates, which are 20% on income up to the standard rate band and 40% on income above that band.
• Foreign pensions: These are also taxable, but Double Taxation Treaties (DTAs) might help you reduce the tax based on what you’ve already paid abroad OR assign taxing rights to Ireland only.

Rental income

You must pay tax if you earn money from renting out property in Ireland.

• Tax rate: Rental income is taxed at the standard income tax rate of 20% or 40%, depending on your total earnings.
• Deductions: You can deduct certain property expenses like repairs, maintenance, and property management fees from your rental income, reducing the tax you’ll need to pay.

Savings interest 

As a retiree in Ireland, any interest you earn from savings is also taxable. It’s taxed at a flat rate of 33% under Deposit Interest Retention Tax (DIRT). Your bank automatically takes 33% of your interest earnings and sends it to the tax authorities. 

Investment income (stocks, bonds, and dividends) 

Income from different types of investments is taxed differently in Ireland.

• Dividends: The money you earn from dividends is taxed at your marginal rate with credit for any tax withheld (DWT = Dividend Withholding Tax).
• Capital Gains: Gains from selling investments or assets are (usually) taxed at 33% under Capital Gains Tax (CGT). You can subtract the cost of buying the investment and any selling expenses from your profits to reduce your taxable amount.

How Income Tax is Calculated for Foreign Income Brought into Ireland 

If you live in Ireland and earn income from another country, you must know how it is taxed. 

For non-domiciled residents, income is calculated based on the remittance basis. 

This means foreign income is taxed when brought to/used/enjoyed in Ireland. 

What Counts as Foreign Income? 

Foreign income is any kind of income you earn outside of Ireland. This can be your salary, profits from investments, rental income from property, or even interest from savings. 

How is Foreign Income Taxed?

Once this income comes into Ireland, it’s taxed like income at the usual rates. 

The rates are 20% or 40%, depending on your total earnings. 

If Ireland has a Double Taxation Agreement (DTA) with the country from which your income comes, you can avoid paying tax twice on the same amount.

Income Tax Exemptions and Reliefs 

If you’ve already paid tax in the country where you earned the income, you might qualify for tax relief. 

Ireland has Double Taxation Agreements (DTAs) with many countries to help you avoid being taxed twice. 

There are exemptions for certain types of income, but the rules around this can be tricky, so it’s a good idea to check with a tax expert to ensure you’re getting the proper relief.

Guide to Remittance Basis of Tax

The remittance basis of tax is a system in Ireland that applies to non-domiciled individuals. 

Under this system, you’re only taxed on income and gains that you bring into (or “remit” to) Ireland rather than your worldwide income/gains. Tax advice should be sought if you intend to utilise the remittance basis of tax.

How a Tax Expert Can Help You Manage Your Taxes Effectively

Figuring out your income tax as an expat in Ireland doesn’t have to be overwhelming. Whether you’re working, running your own business, or retired, knowing how your income is taxed can make managing your money much more manageable.

Each type of income—whether from a pension, rental property, savings, or money from abroad—has its own tax rules. And there may be exemptions or reliefs you can use to lower your tax bill, depending on your situation.

Chatting with a tax expert can help if you need clarification. Our team of specialists at Expat Taxes is here to guide you through managing your taxes as an expat or foreigner in Ireland. 

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DISCLAIMER: The material in this article is for general information purposes only and does not constitute legal or taxation advice. Specific legal, financial, investment and taxation advice should be sought before acting or refraining from acting. All information and taxation rules are subject to change without notice. Expats Taxes accept no liability whatsoever for any action taken in reliance on the information in this article or any of the articles in our blog series. 

Written by Stephanie Wickham, CTA, FCA

Known for her ability to simplify even the most complex tax matters, Stephanie has worked extensively across income tax, corporate taxes, capital gains, and inheritance taxes, with a deep understanding of cross-border tax implications and double tax treaties. Having experienced life as an expatriate herself, Stephanie understands the stress that can come with international moves — and how daunting tax compliance can feel. Her philosophy is simple: tax advice should be straightforward, clear, and tailored to each individual.